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3860 Crenshaw Bl., #217 • Los Angeles, CA 90008
Phone: 323.292.5407 • Fax: 877.690.7818 • Ontario: 909.428.1151
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Tax Doctor Newsletter

December 2016

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December 2016

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Last Year’s Tax Bill Makes This Year’s Opportunity

For the first time in many years, it looks like a last minute tax law change will not upset your ability to fulfill a well thought out tax plan. In addition to making last minute moves to reduce your tax obligation, consider some opportunities to take advantage of recent legislation.
Bullet Point Educators. The $250, above the line deduction is now permanent. If you are a qualified teacher, please make sure you save receipts for your out-of-pocket classroom expenses.Action: Add up your receipts now. If less than $250, consider your needs prior to the end of the year to maximize your use of this tax law.
Bullet Point Small Business. There are numerous provisions for small business tax savings opportunities in recent tax legislation. Most of them benefit specific industries, but a couple are worth considering for most businesses.
Hand moving chess piece
Action: Consider 1st year bonus depreciation and Section 179 provisions to expense qualified capital equipment purchases. Also review your possible use of the Research Credit recently made a permanent part of the tax code.
Bullet Point Seniors who donate. If a senior age 70½ or older, you can now make direct contributions to charities from qualified retirement accounts. The limit is $100,000. The benefit of these direct contributions is they control your adjusted gross income to help you become more tax efficient.Action: Consider a direct contribution to a preferred charity, especially if you would make the donation with after-tax funds anyway.
Bullet Point Sales tax or state deduction. The option to deduct general sales tax as an itemized deduction versus using state income taxes is now permanent.Action: Review your situation. If you anticipate low or no state income taxes, but could itemize, you may wish to use this deduction. Remember to keep receipts of any large purchases to track large sales and use tax payements.
Bullet Point Everyone’s health care reporting. Remember to look for your Form 1095 this year. It should accurately report your family’s health care coverage. Many providers of this form have had a hard time getting this information from insurance carriers.Action: Look for this form in January. Confirm that the information is correctly reported. Notify the provider immediately if the form contains any errors.

Last Year’s Tax Bill Makes This Year’s Opportunity

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Holiday Money Savings Tips

To many the holidays are “the most wonderful time of the year” but, to those on a tight budget the holidays can be very stressful. Why not save money this season by following some of these easy tips:
Question Holiday Cards: Send a holiday postcard rather than a card or letter to reduce postage costs. You can even recycle old cards you did not use from prior years.
Question Wrapping Paper. Use your children’s artwork, or have them help you decorate a roll of plain paper. Ask your local wallpaper store if they have old samples they would be willing to give you. You will not only save money, but you will make a gift that is much more memorable.
Happy holidays gift
Question Decorations. Decorate with nature–use pinecones and evergreen boughs around your home. Fill glass vases with peppermint, colored M&Ms, pistachios, or your favorite candy.
Question Entertainment. Check out your favorite holiday movies from the library, drive around town to see Christmas lights, take a winter wonderland hike, or go caroling.
Question Gift-giving. Ask your family or friends to consider drawing names this year. Have everyone bring one gift and then play a gift-swapping game to see who gets what. To make gifting even less expensive, ask everyone to bring something from their home that they enjoy but no longer need.
Question Don’t buy it, make it. Why not give a gift that truly comes from you. It might be something you make, or bake, or it might be a gift of your time. Some ideas? Offer free babysitting service, dog or cat watching, lawn care or gardening services. Your limit is your imagination.

Holiday Money Savings Tips

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Private Agencies to Start Collecting for IRS

What you need to know
In late 2015 Congress required the IRS to turn over uncollected taxes it is no longer pursuing to outside collection agencies. The agencies are now selected and in early 2017 they will begin their collection efforts. This will impact all of us. Here is what you need to know.
Alert icon Turn up your scam alert. Rest assured the IRS identity scam epidemic is going to hit a new high as these scam artists now will try to impersonate collection agencies. Never pay a collection agency directly for any tax owed. Always send any payments directly to the IRS. If you do not think you owe money to the IRS, ask for help.
Agencies icon Four agencies have been authorized. Only four collection agencies have been authorized to collect unpaid taxes for the IRS. They are:

Conserve Fairport,
New York
Pioneer Horseheads,
New York
Performant Livemore,
California
CBE Group Cedar Falls,
Iowa
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Notice icon You will receive written notice…twice. Before an outside agency calls you, the IRS will send two written notices to you and your representative about the transfer of the bill to an outside collection agency. Without these notices, you must assume any contact with a collection agency saying they represent the IRS is a scam.
Payment icon No payment to the agency. These collection agencies may not receive direct payment. You will be asked to use the IRS online payment system or to send your payment into the IRS. Payment is to be made to the U.S. Treasury and not to the collection agency.

Unfortunately, these agencies are going to begin their collection process right in the middle of this year’s tax filing season. So be prepared now and ask for help if you may be impacted by this change within the IRS.

Private Agencies to Start Collecting for IRS

What you need to know
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Holiday Movie Quiz

Hollywood has made the holiday movie part of our seasonal traditions. How well do you know your holiday movie trivia? Grab a cup of your favorite beverage and challenge your friends with this quiz. Enjoy.
Question Which of the following movies DOES NOT use the Christmas holiday as a theme.

A. Die Hard
B. Home Alone
C. Planes, Trains, and Automobiles
D. Batman Returns
Answer Hard to believe that any of these popular films was really about the holidays, but only Planes, Trains, and Automobiles staring John Candy and Steve Martin takes place over Thanksgiving and not Christmas.

Question Which of these holiday classics was a big box office flop.

A. White Christmas
B. Santa Claus
C. Polar Express
D. It’s a Wonderful Life
Rudolph Nose
Answer It’s a Wonderful Life. Sadly, the movie was a box office failure, not able to cover it’s approximately $3 million in production costs. Hard to imagine such a long-time classic could start out so poorly.

Question Match the actor with their famous holiday movie.

1. Natalie Wood
2. Jim Carrey
3. Jimmy Stewart
4. Bing Crosby
5. Tim Allen
6. Sandra Bullock
7. Zooey Deschanel
a. Holiday Inn
b. While You Were Sleeping
c. Elf
d. Miracle on 34th Street
e. It’s a Wonderful Life
f. How the Grinch Stole Christmas
g. The Santa Clause

Bonus: What famous childhood actor directed How the Grinch Stole Christmas?

Answer 1-d, 2-f, 3-e, 4-a, 5-g, 6-b, 7-c

Bonus: Ron Howard. Ron played Opie in the long-standing sit com Andy Griffith Show.


Question Place these holiday favorites in order of release from earliest to latest.

A. The Polar Express
B. Jingle All the Way
C. A Christmas Story
D. White Christmas
E. The Muppets Christmas Carol
Answer d-1954, c-1983, e-1992, b-1996, a-2004

Question And finally, please name one of the most famous gifts sought in all films. What does the leading character of A Christmas Story want for Christmas?
Answer Red Rider BB gun. This famous childhood quest of the unattainable during the holidays helped create a classic.

Enjoy this holiday season. May time spent with family and friends be peaceful and fulfilling.

Holiday Movie Quiz

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As always, should you have any questions or concerns regarding your situation please feel free to call.

This newsletter is provided by

Call the Tax Doctor
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3860 Crenshaw Bl., #217
Los Angeles, CA 90008

Phone: 323.292.5407
Fax: 877.690.7818
Ontario: 909.428.1151

taxdoc4u@gmail.com
www.taxdoc4u.com

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Year-End Tax Planning Tip: Keep A Log of Your Business Miles — Small Business Tips

You may be able to take the standard mileage rate for business miles driven on your personal vehicle in 2016 or else depreciate the cost of owning your business vehicle used in your business. Here’s how: 1. If you’re using your personal vehicle for business, you can take a deduction for the business miles that […]

via Year-End Tax Planning Tip: Keep A Log of Your Business Miles — Small Business Tips

WHAT TO GIVE

Senior Gift Giving Tips

3860 Crenshaw Bl., #217  •  Los Angeles, CA 90008
Phone: 323.292.5407 • Fax: 877.690.7818 • Ontario: 909.428.1151
www.taxdoc4u.comtaxdoc4u@gmail.com
Tax Tips

Weekly Tax Tip

Senior Gift Giving Tips
Make your year-end gifts tax efficient

Category:
Retirement

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One of the potential benefits of your retirement years is having funds available to help others work through the challenges of life. As you consider gift giving prior to the end of the year, here are some tips to make your giving strategy more tax efficient.

Know the annual gift limits. If providing funds as a gift you are limited to $14,000 in 2016 (and 2017) before the gifts need to be reported to the IRS. This limit is per individual, so both you and your spouse can provide $14,000 (total of $28,000) per person per year. But you need to proceed with caution, a birthday or holiday gift can accidently cause an excess gift total if given in addition to an annual gift of cash.

Direct contributions to charities. With the passing of the PATH act in late 2015, seniors who are age 70 ½ or older may make direct contributions to charities from qualified retirement plans like a Traditional IRA. There is an annual limit of $100,000. If you plan to give to a charity why not consider this alternative. It may create other tax benefits depending on your situation.

Helping pay for college. Consider donating to a grandchild’s college directly or through a college savings plan like a 529 plan. Using the gift limits mentioned earlier, you can donate up to $14,000 per year per individual. Are you a new grandparent? Get your child to open the 529 plan for their newborn so you can make deposits to the account over time.

Avoid the tax torpedo. When you reach 70 ½ years old, you will trigger the annual minimum distribution requirements on many of your retirement plans. Know which ones will be triggered and determine if pulling some funds out of these plans now can be more tax efficient, versus when you are required to do so at an older age. This planning can save thousands of unwanted taxes and provide tax efficient gifts for others.

These are but a few ideas to use as tax-efficient gift giving strategies as you get older. There are many others, so it often makes sense to set up an appointment to review your options.

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Published: 11/25/2016 12:00 PM
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